Delaware data center proposal continues to face public opposition as state and local officials propose new regulations

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The application for a massive data center in Delaware has state and local government officials offering new regulations as residents continue to voice opposition because of the possible environmental impact.

Starwood Digital Ventures, a subsidiary of Starwood Capital Group, and New Castle Campus Development LLC have submitted plans to build a 1.2-gigawatt data center in Delaware City, which sits along the Delaware River. If approved, the campus would include 11 data center structures, totaling 6 million square feet. It would be the first large-scale data center in Delaware.

Delaware residents say they have concerns about potential consequences to air, water, energy supply and coastal areas, driving New Castle County Council and state legislators to move to set up rules for how and when such structures could be built in the state.

New Castle County proposed ordinance

New Castle County Councilman Dave Carter has introduced an ordinance regulating how this and future data centers could be built. His measure was heard this week during a meeting of the Preliminary Land Use Service, where state agencies made recommendations on the directive and heard comments from the public.

The ordinance creates a distinct land use category, requiring a special use permit. The regulations would apply to new data center development or expansions over 20,000 square feet. The facilities could be located in industry and heavy industry zones if approved after a special project review.

Under the ordinance, data centers could not be built less than 1,000 feet from any residential area. It also mandates a battery energy storage system and creates standards for noise, traffic and water use.

Carter said he’s also hoping the state can help with drafting language around reviews of projects under the Delaware Coastal Zone Act. The act regulates new and existing manufacturing, heavy industry and bulk product facilities in the state’s coastal zone.

“We believe that hyperscale data centers, the larger ones — much different than ones we have — operate very much like heavy industry, and indeed should be considered heavy industry,” he said. “They have enormous energy use requirements. They have large-scale, often diesel, backup generation, which is an industrial use. Particularly at the scale they’re doing it, noise, heat, air emissions are very significant.”

Starwood Capital Group did not respond to a request for comment.

Possible impacts to Delaware’s energy supply

Under the proposed ordinance, applicants wishing to build data centers in the county would have to demonstrate the availability of sufficient power grid capacity, or provide enough onsite generation.

Carter said that the proposed data center could devour the equivalent of about 8 million to 11 million megawatt hours per year, if fully utilized. Delaware’s electric customers use roughly 11.3 million megawatt hours of electricity a year, according to the state’s energy profile. That profile also reports that the state already uses 70 times more energy than it produces.

State Rep. Frank Burns, D-Pike Creek, said he opposes the project in part because of the enormous amounts of electricity it could gobble up.

“I think that it’s a danger to the reliability of the grid and the electrical supply, as well as danger to what electrical customers in Delaware are paying in their electric bills,” he said. “As it is, it will use a significant portion of the supply that normally is used by the state of Delaware. So from an energy security standpoint, I really think it’s a bad move.”

Burns has introduced legislation to be considered when lawmakers go back into session in January that would establish a separate rate for large energy-use facilities. He said it’s intended to make sure the project doesn’t offload the costs onto state ratepayers. He added that more legislation on this issue is likely to come next year.

Rising energy demand driven by data centers is threatening to cause a shortfall in electricity supply in the coming years. Many Delawareans have been struggling with rising utility bills, with weather and year-over-year rate increases partly to blame for the price hikes.

Delaware gets its power from the PJM Interconnection regional grid, which services Washington, D.C., and part or all of 13 states, including all of Pennsylvania and New Jersey.  Some critics complain that PJM is not moving fast enough to connect new renewable energy sources to the grid. Delaware requires renewable energy to make up a certain amount of supply.

Potential impact to water resources

Water-thirsty data centers consume many millions of liters of freshwater for cooling the servers and electricity generation. Computer servers running 24/7 in a confined space run the risk of overheating, requiring developers to deploy complicated air conditioning or water cooling systems.

A report from Google this year on its data centers showed that in 2024 the facilities drank a total of approximately 8.1 billion gallons of water. In 2023, its data centers consumed 6.1 billion gallons of water — 17% more water than the previous year.

Carter’s ordinance prohibits open loop cooling, which uses water evaporation, unless wastewater is utilized.

Bear resident Joshua Haug said he’s worried about the amount of water the proposed data center would use to operate.

“Such extreme rates of water consumption would have severe effects on 200,000 people in the state that depend on the wells for their daily needs,” he said. “A woman — Beverly Morris in Mansfield, Georgia — lives 400 yards away from a 2 million square foot data center. She and many others and surrounding communities are now unable to flush their toilets, drink water from her kitchen sink through the groundwater being severely depleted.”

Noise concerns

Carter’s ordinance also requires the noise level of any potential new data center to be under 55 decibels to minimize the impact to surrounding neighborhoods.

The Sierra Club of Delaware Chapter President Dustyn Thompson said he supports the limit listed in the rules Carter is proposing for noise since low frequency noise from data centers can affect people’s well-being. The group opposes the project.

“Long-term exposure to this noise can lead to serious health issues, such as exacerbated mental health conditions, cardiovascular problems, sleep disturbances and cognitive impairment,” he said. “The updates regarding low frequency noise are crucial, since traditional sound barriers like berms and trees cannot effectively mitigate it.”

Next steps for regulation

The Department of Natural Resources and Environmental Control made numerous suggestions to improve the ordinance, including adding a requirement that data center applications must describe any plans for discharging water that has been used for cooling data centers and expanding the county’s limitations on transportation emissions to also include greenhouse gasses and other air pollutants.

Carter said he would take the comments he received from state agencies to draft a substitute ordinance for the New Castle County Planning Board to consider at its Oct. 7 meeting.